Bloomberg News

Ecuador’s October Prices Rise at Slowest Pace Since May

By Nathan Gill
November 07, 2012

Consumer prices in Ecuador rose last
month at their slowest pace since May as households limited
spending to boost savings ahead of December holidays.

Prices in the Andean country climbed 0.1 percent in October
from a month earlier, while annual inflation fell to 4.94
percent from 5.22 percent the month before, the National
Statistics and Census Institute said today in a report on its
website.

Families cut back on expenses last month in anticipation of
higher outlays in December during the Christmas holiday and a
week-long celebration in Quito, said Maria Herrera, an economics
professor at the Universidad Catolica in Quito. Inflation in
December will probably quicken to levels above the average of
the last three months, she said.

“Normally people are reserving themselves for Christmas
when there is a bit more spending and excess of funds,”
Herrera, who forecast prices will increase an average 5 percent
in 2012, said by phone from Quito. “In December you’re going to
see prices rise much more.”

Price increases, led by alcohol and tobacco, were offset by
declines in goods and services, recreation, food and household
articles, the statistics agency said.

Prices rose the fastest in the highland Andean city of
Ambato, jumping 1.6 percent in October from the previous month,
while costs fell 0.18 percent in the nation’s largest city,
Guayaquil, the agency said. Ecuador, the smallest member of the
Organization of Petroleum Exporting Countries, subsidizes fuel
costs and the domestic use of natural gas.

Producer prices fell 0.05 percent from the previous month
and increased 2.83 percent from October 2011.

Consumer prices are forecast to gain an average 5.14
percent this year compared with 4.47 percent in 2011, according
to the Finance Ministry’s 2012 budget. The economy may expand
4.8 percent this year, the central bank said in July, less than
the 5.35 percent originally estimated in the 2012 budget.

To contact the reporter on this story:
Nathan Gill in New York at
ngill4@bloomberg.net.

To contact the editor responsible for this story:
Joshua Goodman at
jgoodman19@bloomberg.net.